The unvarnished truth is clear. If David Cameron wanted to, he could force Bermuda to fall into line and simultaneously put Britain's house in order.

The British prime minister holds all the constitutional aces in relation to Bermuda. But the real issue is whether he has the political will to exert that power. It seems the perceived "independence" of the overseas territories provides a convenient excuse for the Cameron government to have it both ways. The prime minister can say he is all for transparency and then fail to achieve it by blaming a small, remote island for blocking its implementation.

I once worked for the US Senate foreign relations committee when John Kerry, then chairman of a subcommittee investigating drug trafficking and money laundering, raised questions about the role of the Cayman Islands as a money laundering centre. The British diplomat representing Cayman interests in the United States came to make the arguments for the island. The Cayman position was clearly absurd. So in the end the UK government forced Cayman to adopt anti-laundering controls. It can do the same with Bermuda on issues of tax co-operation.

Bermuda really is utterly dependent. It relies on its relationships with the US and the UK for everything. Although blessed with a superb climate, good beaches and a few marvellous golf courses, it even lacks the water to support its 69,500 citizens. The Bermuda economy lives and dies on its connections with the City of London and the American financial system. To end Bermuda intransigence, all the UK needs to do is refuse to recognise the legitimacy of Bermuda corporations and cut off Bermuda connections to the UK insurance market.

The Bahamas asserted its independence at a time when it was protecting the co-founder of the Medellin cartel and notorious drug trafficker, Carlos Lehder, and his sidekick Robert Vesco. The US pointed out that it could ruin the Bahamas tourist business by cutting off customs "preclearance" that allows American Customs and Border agents to screen passengers in the Bahamas before they got on a flight to the US. Surely there are tools in the kit that a serious UK government could use to bring Bermuda in line if it had real political will?

So who and what is Bermuda protecting? It makes a living by preventing the rest of the world from seeing the amount of money siphoned out of the global tax system by exotic fictional schemes. If these spurious avoidance and evasion schemes were exposed to public view, the body politic of all the nations that have been pushed into austerity by a lack of tax revenue would force immediate and radical change. As it is, the pressure is on because some of the tactics used by a few corporations have become public.

We still do not have the all facts on the insurance schemes, private pension schemes, protected cell companies and other related fictional tax exotica that make profits become losses, ordinary income become capital gains, and make other income disappear entirely. Let us force Bermuda to open its doors and windows to sunlight and see how real democracy reacts to what we see.